In 2025, businesses can access a range of funding options and incentives to help install solar panels, significantly reducing upfront costs and improving their return on investment.

Key Federal Incentives

• Federal Investment Tax Credit (ITC): Allows businesses to deduct 30% of eligible project costs—including solar panels, design, equipment, and installation—from federal income taxes. Additional bonuses (for Energy Community, Domestic Content, or Low-Income siting) can increase the credit up to 50% for qualifying projects. This incentive applies to commercial projects that commence construction by July 4, 2026, or are placed in service by December 31, 2027.
• MACRS Depreciation: Businesses can accelerate depreciation of solar investments (Modified Accelerated Cost Recovery System), creating further tax savings.
• USDA REAP Grant: Agricultural producers and rural small businesses may qualify for grants covering up to 40-50% of eligible solar costs—plus guaranteed loans for the remainder.

State and Local Opportunities

• State Solar Grants & Loans: Many states offer upfront rebates or low-interest loans for solar projects. For example, Pennsylvania’s Solar Energy Program provides grants of up to $1.50/watt (maximum $1 million) and loans of up to $ 3 per watt (maximum $5 million), with a matching investment requirement.
• SRECs (Solar Renewable Energy Certificates): Businesses can earn SRECs based on the amount of solar energy produced and sell them for additional income where state programs exist.
• Special State Grants: Some states offer bonus grants, such as Pennsylvania’s RISE PA Grant, which covers up to 50% of solar installation costs for select manufacturers and agricultural operations.

Additional Funding Models

• PACE Financing: Some regions offer Property Assessed Clean Energy (PACE) loans that are repaid through property tax assessments, reducing upfront costs.
• Power Purchase Agreements (PPAs): Businesses can enter into PPAs or community solar programs to access solar energy with little to no upfront investment by simply purchasing the power produced by third-party-owned systems.

By combining federal, state, and local programs and exploring alternative financing options, most businesses can significantly reduce the cost of going solar and achieve a faster financial return on investment.